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Is 'Everything We’ve Learned About Modern Economic Theory Wrong'?

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Swammerdami

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On the topic of "Do some academics not deserve their 'Dr.'?" :) ...


Google News home page serves up a link to Bloomberg's:
"Everything We’ve Learned About Modern Economic Theory Is Wrong

Ole Peters, a theoretical physicist in the U.K., claims to have the solution. All it would do is upend three centuries of economic thought."​

I did read the article and even skimmed the journal paper which is a click or two away. AFAICT Dr. Peters, like a 6-year old who's found his lost toy hammer, has just rediscovered Kelly's Criterion — a simple mathematical fact known to anyone who's Googled "gambling strategy" or "portfolio theory." (Before awarding kudos to "Kelly" be aware that the first publication on the underlying principle comes from the 18th century Daniel Bernoulli (who was, like Peters, a theoretical physicist). And anyway, most market analysis involves many actors, where the Bernoulli-Kelly result is drowned out (cf. Central Limit Theorem).

Am I wrong?

To paraphrase Mark Antony, I start this thread to bury Dr. Peters, not to praise "Modern Economic Theory" in general. :)
 
Swammerdami said:
On the topic of "Do some academics not deserve their 'Dr.'?" :) ...


Google News home page serves up a link to Bloomberg's:
"Everything We’ve Learned About Modern Economic Theory Is Wrong

Ole Peters, a theoretical physicist in the U.K., claims to have the solution. All it would do is upend three centuries of economic thought."​
...
To paraphrase Mark Antony, I start this thread to bury Dr. Peters, not to praise "Modern Economic Theory" in general. :)
Click to expand...
Well, maybe "Mr." Peters was using the "royal we". It appears that when Peters was learning whatever he has learned about modern economic theory, he managed to miss out on marginal utility, and the law of diminishing returns, and risk aversion. (He even missed exponential growth: his analysis assumes that modern economic theory actually believes the people offering the bet will actually be able to pay the 400 quadrillion dollars they might end up owing you!)
 
My first thought is that the Bloomberg article is probably a terrible interface to read about his thoughts, and I imagine analysis coming from an economist who was more familiar with the ideas would likely be able to explain the relevance of them a bit better.

Beyond that it would take me some pretty comprehensive reading to say much meaningful about it. It sounds like a useful theory, but nothing along the lines of upending economics.
 
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